Plaintiff, Pringle-Associated Mortgage Corporation, was the owner of a tract of ground which it acquired through foreclosure proceedings. For a considerable period of time thereafter, and during the events and circumstances giving rise to this suit, the property was involved in extensive and complicated litigation. See Pringle-Associated Mortgage Corporation v. Eanes, 197 So.2d 160 (La.App. 1 Cir. 1967); Pringle-Associated Mortgage Corporation v. Eanes, 251 La. 711, 206 So.2d 81 (1968); Pringle-Associated Mortgage Corporation v. Eanes, 211 So.2d 399 (La.App. 1 Cir.
On August 26, pursuant to the agreement, Mr. Cox borrowed $250,000.00 from Pringle. The note was payable on or before nine months after date, in accordance with the terms of the agreement. At the end of that time, the litigation referred to above was still pending, and the loan was extended for an additional period of three months. At that time, according to the correspondence in evidence, it was the opinion of the parties involved that, because of the litigation, a title policy could not be issued on the property. As of that time, Mr. Cox had made no application for long term financing, apparently because it was presumed that no title policy could be obtained.
On June 14, 1967, defendant was notified that the plaintiff was undertaking to arrange for the issuance of a title insurance policy, notwithstanding the litigation, and that defendant would be advised when the policy would issue. After some negotiation, Pringle received the following letter from Frank L. True, Jr., President of Southwest Title Corporation, dated August 4, 1967:
By letter of August 2, 1967, defendant notified plaintiff that, because the litigation was still pending, he had elected to be restored to the status quo, in accordance
After trial on the merits, judgment was rendered in favor of defendant and against plaintiff, recognizing defendant's right to rescind the sale of the property, and ordering plaintiff to accept the transfer thereof, and to pay defendant $476,036.21 with interest at 7% from August 4, 1967, until paid, subject to a credit of $247,000.00 on delivery to Cox of the notes executed by him. Certain other alternatives were also ordered. This judgment was dated June 18, 1969. On June 24, 1969, more than three clear judicial days later, under the authority of Article 1951 of the Code of Civil Procedure, the judgment was amended in certain respects regarding how interest was to be computed. Plaintiff has appealed from both judgments, and defendant has answered the appeal, complaining of several aspects thereof.
Plaintiff takes the position that the title insurance policy called for in the August 4, 1966, agreement was available to defendant before the expiration of the three months extension, and that defendant is not entitled to be returned to the status quo. It claims that defendant is obligated to obtain his long term financing and pay off the construction loan, or that it has the right to foreclose on its collateral mortgage.
Defendant claims that the existence of the litigation and not the issuance of the title policy is the condition on which his right to be returned to the status quo is predicated, and that, since the title was defective at the end of the three months extension, he is entitled to re-transfer the property to plaintiff and be returned to the status quo as defined in the said agreement.
We think that defendant's position is well taken. In construing the agreements, we are bound by the following standards, set forth in the Civil Code, in Articles 1945-1950.
It seems apparent, when reading the agreement as a whole, that it contemplated the successful termination of the litigation within a year. It also appears that the issuance of title insurance is considered as indicative of the validity of the title, rather than a condition of the contract. That is, within one year plaintiff was obligated to put the title to the property in such condition that title insurance would issue routinely. We do not believe that the parties intended otherwise when the agreement was drawn.
Neither is there any evidence offered to show that any lender would accept a title policy founded upon an indemnity agreement rather than the validity of the title itself as the basis for long term financing.
Finally, it does not appear that defendant was ever advised, during the life of the agreement, that such a policy was available, although plaintiff assumed the burden of so doing in its letter of June 14, 1967.
In his answer to the appeal, defendant complains of the failure of the court to allow reimbursement of $750.00 paid by him to Pringle as a construction loan fee when the loan was extended for three months. An examination of the reasons for judgment reveals that this amount was included. $13,501.31 of interest was admitted by Pringle. The initial construction loan fee of $3,000.00 and the extension fee of $750.00 were disputed, Pringle claiming these were not interest. The judge awarded $17,251.31, which is the sum of all of those amounts. This award is not questioned by Pringle.
Defendant further alleges that the June 24 judgment differs in substance from the June 18 judgment, and the court was without authority to make substantive changes under Article 1951 of the Code of Civil Procedure. His contention in that respect is correct. The changes in the June 18 judgment were not to correct errors in calculation, but rather to amend the way in which interest was to be computed. This is a substantive change, not permitted by Article 1951. The June 24, 1969 judgment is, therefore, invalid, and the June 18 judgment is the only valid, appealable judgment in the record. Our examination of that judgment, in the light of the August 4, 1966, agreement, and our interpretation thereof, leads us to the conclusion that it correctly resolves the issues between the parties.
The judgment of June 24, 1969, is, therefore, annulled and set aside, and the judgment of June 18, 1969, is reinstated, and affirmed, at plaintiff's cost.